How Much House Can I Afford in Texas?
The 28/36 rule, Texas property taxes, and salary-by-salary scenarios to help you set a realistic budget
In this guide:
The 28/36 Rule Explained
The single most useful affordability shortcut is the 28/36 rule. The 28 refers to your front-end ratio: your total housing payment — principal, interest, property taxes, homeowners insurance, and any HOA dues (collectively known as PITI or PITIA) — should not exceed 28% of your gross monthly income. The 36 refers to your back-end ratio: all of your monthly debt payments combined, including the mortgage, car loans, student loans, and minimum credit card payments, should not exceed 36% of gross monthly income.
Lenders use very similar ratios when they underwrite a loan. Conventional loans typically allow back-end ratios up to 45%, and FHA loans can go higher with compensating factors. But just because a lender will approve you doesn't mean it's the right move for your budget. The 28/36 rule is a comfort threshold, not a maximum.
Quick Math:
- Gross monthly income: Annual salary divided by 12
- Max housing payment (28%): Gross monthly income x 0.28
- Max total debt payments (36%): Gross monthly income x 0.36
- Available for housing: 36% cap minus your existing monthly debts
Why Texas Property Taxes Change the Math
Texas has no state income tax, which is great for take-home pay. The trade-off is property taxes. Effective property tax rates in Texas commonly fall between 1.8% and 2.3% of a home's assessed value per year, depending on the county, school district, and city. Some areas with MUD (Municipal Utility District) or PID (Public Improvement District) overlays push the total even higher.
On a $300,000 home, a 2.1% effective tax rate means about $6,300 a year — or $525 a month — just in property taxes before you even touch principal, interest, or insurance. In a state with a 1% effective rate, that same home would carry only $250 a month in taxes. The Texas tax adder shrinks how much home a given income can support.
When you build your budget, always quote the full PITI payment, not just principal and interest. A loan officer who quotes you only P&I in Texas is doing you a disservice — taxes and insurance can easily add 30-40% on top of the base mortgage payment.
Affordability by Salary
Here's a sense of what each income bracket typically supports in Texas. These examples assume a 30-year fixed loan, a moderate down payment (5-10%), no other significant monthly debts, an effective property tax rate around 2%, and homeowners insurance of roughly $150-200 per month. Your actual numbers will vary with the rate environment, your credit, your DTI, and the specific county.
$50,000 salary
Gross monthly income: about $4,167. Max comfortable PITI at 28%: about $1,167.
That typically supports a home price in the $150,000 to $180,000 range. First-time buyer programs and down payment assistance can help close the gap in higher-cost metros like Austin and Dallas.
$75,000 salary
Gross monthly income: about $6,250. Max comfortable PITI at 28%: about $1,750.
Generally supports a home in the $230,000 to $270,000 range. This is often a sweet spot for entry-level homes in Lubbock, Amarillo, and parts of San Antonio and Fort Worth.
$100,000 salary
Gross monthly income: about $8,333. Max comfortable PITI at 28%: about $2,333.
Typically supports a home in the $310,000 to $370,000 range. Comfortable mid-tier territory in most Texas markets and approaching the median home price in major metros.
$150,000 salary
Gross monthly income: about $12,500. Max comfortable PITI at 28%: about $3,500.
Generally supports a home in the $470,000 to $560,000 range — solid move-up buyer territory across nearly every Texas market.
Today's Mortgage Rates
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Conventional
FHA
VA
USDA
Jumbo
📊 Source: St. Louis Federal Reserve
How Loan Type Affects What You Can Afford
The loan program you choose has a real impact on your maximum purchase price — both because of qualifying ratios and because of how each program treats down payments and mortgage insurance.
Conventional Loans
Down payments start at 3-5% for qualified buyers. PMI applies under 20% down but drops off automatically once you reach 22% equity. DTI is generally capped around 45-50%. Best for buyers with strong credit who want flexibility.
FHA Loans
3.5% minimum down with credit scores as low as 580. FHA allows higher DTIs and is more forgiving of credit blemishes. The trade-off is mortgage insurance premium (MIP) for the life of the loan in most cases. Often lets buyers qualify for more home than conventional.
VA Loans
Zero down, no PMI, and competitive rates for eligible veterans, active-duty service members, and surviving spouses. Maximum affordability is essentially limited only by your residual income and DTI — VA underwriting is unusually flexible.
USDA Loans
Zero down for buyers in eligible rural and suburban areas of Texas, with income limits based on household size and county. Great option in much of West Texas and the Panhandle.
First-Time Buyer Programs in Texas
Texas offers multiple programs designed to help first-time and moderate-income buyers stretch their budget. The Texas State Affordable Housing Corporation (TSAHC) and the Texas Department of Housing and Community Affairs (TDHCA) both run down payment assistance and below-market-rate mortgage programs. Eligibility depends on income, purchase price, and the county where you're buying.
Many of these programs combine a competitive 30-year fixed rate with a grant or forgivable second lien to cover down payment and closing costs. They're especially powerful for buyers in the $50,000-$80,000 income range, where every dollar of upfront cost matters.
A good local mortgage broker can run you through which programs you actually qualify for in minutes — there's no reason to guess.
Frequently Asked Questions
How much house can I afford on a $60,000 salary in Texas?
On a $60,000 annual salary ($5,000/month gross), the 28/36 rule suggests a maximum housing payment of about $1,400/month. After accounting for Texas property taxes (often 2% or more of home value) and homeowners insurance, that typically supports a home price in the range of $185,000 to $215,000, depending on your interest rate, down payment, and other monthly debts.
How much house can I afford on a $75,000 salary?
A $75,000 salary translates to about $6,250/month gross income, which under the 28% front-end rule allows roughly $1,750/month for housing. In Texas, with property taxes baked in, that generally supports a purchase price between $230,000 and $270,000 with a typical down payment and current rate environment.
How much house can I afford on $100,000 a year in Texas?
With $100,000 in annual income (about $8,333/month gross), you could comfortably support a housing payment near $2,330/month under the 28/36 rule. In Texas markets, that usually translates to a home price of roughly $310,000 to $370,000, again depending on rate, down payment, taxes, and existing debt.
What is the 28/36 rule?
The 28/36 rule is a long-standing affordability guideline. It says your total housing payment (principal, interest, taxes, and insurance, plus HOA if any) should not exceed 28% of your gross monthly income, and your total monthly debt payments — including the mortgage — should not exceed 36% of gross income. Lenders use similar ratios when underwriting.
Does Texas property tax affect how much house I can afford?
Yes — significantly. Texas has no state income tax but among the highest property tax rates in the country, often between roughly 1.8% and 2.3% of assessed value annually. That extra tax burden directly increases your monthly PITI payment, which means you typically qualify for less home in Texas than you would on the same income in a low-tax state.
Can I afford a $300,000 house on $60,000 a year?
It would be a stretch. A $300,000 home in Texas with property taxes and insurance often runs $2,200-$2,500 per month including PITI, which is well above the 28% comfort threshold for a $60,000 income. It may be possible with a large down payment, low debts, and an FHA loan, but it would leave little financial cushion.
How much house can I afford on $50,000 in Texas?
On a $50,000 salary ($4,167/month gross), the 28% rule limits housing to about $1,167/month. After Texas property taxes and insurance, that typically supports a home in the $150,000 to $180,000 range. First-time buyer programs and down payment assistance can help stretch this further.
Does FHA or conventional affect how much house I can afford?
Yes. FHA loans generally allow higher debt-to-income ratios (often up to 50%) and require only 3.5% down, which can let buyers qualify for more home. Conventional loans usually cap DTI lower but avoid FHA's mortgage insurance premium. The right choice depends on your credit score, down payment, and long-term plans.
Want a Real Number Based on Your Situation?
A 10-minute conversation with a Raider Mortgage advisor will give you a personalized affordability range — including taxes, insurance, and the right loan program for your goals.